A medical spa is a business that offers medical spa treatments. Like regular spas, medical spas pay detailed attention to more difficult issues like widespread discoloration and wrinkles. Their treatments include deeper chemical peels, injections (such as Botox), and laser treatments.

A medical spa is a niche idea in the Health and Wellness Spas industry and businesses in this industry offer spa services such as massages, facials, and body treatments. The industry includes day spas, spa resorts, hotel spas, and medical spas.

There are 19,919 Health & Wellness Spa businesses in the US as of 2022, an increase of 0.4 percent from 2022. The number of businesses in the Health & Wellness Spas industry in the US has grown 0.4 percent per year on average over the five years between 2017 – 2022.

The Health & Wellness Spas industry in the US is labor intensive which means businesses are more reliant on labor than capital. The highest costs for businesses in the industry are Wages (69.6 percent), Purchases (5.3 percent), and Rent & Utilities (1.2 percent).

Steps on How to Start a Medical Spa Business

  1. Conduct Market Research

If you are considering starting a medical spa business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process should be to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source information that will help you maximize your business, data that will give you a reliable clue of what your potential market is looking for from a medical spa company, and also help you operate your medical spa business with less stress.

a. Who is the Target Market for a Medical Spa Business?
  • Middle-aged people – who are usually stressed from work and may have wrinkles and insomnia.
  • Patients with sicknesses that include chronic pain.
  • The aged who might suffer from severe joint pains
  • Injured Sports Men and Women.
b. Is Medical Spa Business a Profitable Business?

Yes, the medical spa business is very profitable. Available data shows that the average medical spa brings in $1 million per year according to AmSpa. In the 2019 industry report, top practices can approach $4–$5 million. Average revenue per spa location rose to $803,000 in 2017, an increase of 1.9 percent on the 2016 average of $788,000. With average revenues now passing the benchmark $800,000 level, the 2017 out-turn represents a further steady advance for the industry.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the medical spa business because medical spa is a subset of the health & wellness spas industry.

d. Who are the Major Competitors?
  • Canyon Ranch
  • Montage Hotels & Resorts
  • The Woodhouse Spas Corporation
  • Massage Envy Franchising LLC
  • Radiance Medspa
  • Pure Vanity
  • V/O Med Spa
  • Kalologie 360 Spa
  • Sirius Day Spa
  • Face to Face Spa
  • Massage Green Spa
  • Pure Vanity
  • The Elements Massage brand
  • Spavia
  • Infinity Med Spa
  • Trifecta Med Spa Downtown
  • Cadella Medical Spa and Wellness Center
  • SOLUX Med Spa
  • Georgetown Allure Medical Spa
  • The Natural Look MedSpa
  • Persona Medical Spa
  • Radiant Skin
  • Simply Beautiful Medical Spa
  • Reverse Laser and Medical Aesthetics, LLC
  • Lake Austin Spa Resort
  • We Care Detox Spa
e. Are There County or State Regulations or Zoning Laws for Medical Spa Business?

Yes, there are county and state regulations for medical spa businesses and it is important to state that each state has its own requirements. For example, administering Botox, collagen, and Restylane in California is a medical procedure and is regulated by the medical board of California.

Additionally, the management of a medical spa requires the same supervision as administering medical care. If you wish to perform medical treatments such as Botox and fillers, the procedures must be performed by a medical professional and paid directly to the medical professional.

f. Is There a Franchise for Medical Spa Business?

Yes, there are franchise opportunities for the medical spa business, and here are some of them;

  • Massage Envy Franchising LLC
  • Radiance Medspa ($269,300 – $533,300)
  • Massage Green Spa (Initial investment: $170,000 – $282,000)
  • Pure Vanity (Initial investment: $387,000 – $746,000)
  • V/O Boutique Medical Spa (Initial investment: $583,850 – $723,900)
  • Kalologie 360 Spa (Initial investment: $150,000 – $460,000)
  • The Elements Massage brand (Initial investment: $312,650 – $560,750)
  • Sirius Day Spa (Initial investment: $477,950 – $698,750)
  • The Woodhouse Spas Corporation (Initial investment: $1,231,600 – $1,833,100)
  • Spavia (Initial investment: $292,465 – $636,905)
  • Face to Face Spa (Initial investment: $237,000 – $444,000)
g. What Do You Need to Start a Medical Spa Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Well Equipped Spa Facility
  • Source of Supplies
  • Insurance
  • EIN (Employer Identification Number) / Federal Tax ID Number.
  • A Corporate Bank Account
  • Employees
  • Operational Capital (For Ongoing Expenses)
  1. Memorable Business Name ideas for Medical Spa

  • Safe Hands© Medical Spa, Inc.
  • RELIEF@ Medical Spa, LLC
  • STRESSLESS© Medical Spa, Inc.
  • Spa Solutions® Medical Spa, Inc.
  • Queen Parlor™ Medical Spa, Inc.
  • Green Press™ Medical Spa, LLC.
  • Princess Dorothy© Medical Spa, LLC
  • Amie Pamela® Medical Spa, Inc.
  • Grace Forum© Medical Spa, Inc.
  • Doris Clarkson© Medical Spa, Inc.
  • Womb Place® Medical Spa, LLC
  • Reiz Porkpie® Medical Spa, LLC
  • Hands On™ Medical Spa, LLC
  • Brown Williams© Medical Spa, Inc.
  • Morning Rise® Medical Spa, Inc.
  • Emmy Bee™ Medical Spa, Inc.
  • Mariah DJOCK™ Medical Spa, Inc.
  • Special Corner© Medical Spa, Inc.
  • Metropolitan® Medical Spa, LLC
  • Rest Well™ Medical Spa, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Medical Spa?

Even though there are several options such as sole proprietorship, partnership, limited liability company (LLC), and corporation, when it comes to the business structure for a medical spa business, the one that most players consider is an LLC.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Medical Spa Business?
  • General Business License
  • Medical License
  • Cosmetology License
  • Esthetician License
  • Electrologist License
  • Massage Therapist License
  • Manicurist License
  • Certificate Of Occupancy
  • Zonal Permits
  • Signage Permit
  • Sales Tax Permit and Federal Income Tax ID
  • Health Inspection (Operational State Facility Inspections)
d. What Type of Certification is Needed to start a Medical Spa Business?
  • Spa Management Certificate or Degree
  • Medical Esthetician Certification
  • Certified Nursing Assistant (CNA), Registered Nurse (RN).
e. What Documents are Needed to Open a Medical Spa Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (Certificate of Occupancy (CO))
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a medical spa business, you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Medical Spa Business?

The startup cost for a medical spa business is not uniform as some factors can influence the cost. But basically, a medical spa business will cost from $10,000 to over $100,000 to start, and that can easily go higher depending on your overall business goals and objectives.

b. What are the Costs Involved in Starting a Medical Spa Business?
  • The Fee for registering the business in the United States – $725.
  • The budget for legal fees, insurance, permits, and license – $5,000
  • The cost of leasing a facility – 50,000
  • The amount needed to renovate your Facility (electrical, furnishings, plumbing, painting, and landscaping) – $10,000.
  • The Cost for the purchase of furniture and equipment – $60,000
  • Other start-up expenses including stocking of supplies – $30,000
  • Phone and utility deposits – $3,500
  • Cost for payment of salaries for the first 3 months of operation – $50,000
  • Additional Expenditure (Business cards, Signage, Adverts, and Promotions et al) – $5,000
  • The cost of launching an official website – $600
  • The cost for our grand opening party – $3,000
  • Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Medical Spa Business?
  • The size of the medical spa business
  • The choice of location
  • The required licenses and permits
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing
  • The cost for furnishing and equipping the medical spa business
  • The cost for insurance policy covers
  • The cost for registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost for the grand opening of the medical spa business.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

Actually, it is not compulsory to build a new facility for your medical spa business, but, if you have the required finance, it will pay you to build your own parking facility and administrative office. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Medical Spa Business?
  • Medical spa supplies
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
  • Equipment maintenance
  • Insurance
  • Marketing and business promotion costs
f. What is the Average Salary of your Staff?
  • Chief Operating Officer (Owner) – $68,000 Per Year
  • Spa Manager – $48,000 Per Year
  • Licensed Aesthetician- $47,000 Per Year
  • Experienced Esthetician (Laser Technician Med Spa) – $47,000 Per Year
  • Nurse Practitioner “Experienced Cosmetic Injector” – $47,000 Per Year
  • Medical Spa Sales/Patient Care Coordinator – $38,000 Per Year
  • Accountant – $38,000 Per Year
  • Customer Service Officer (Receptionist) – $26,100 Per Year
g. How Do You Get Funding to Start a Medical Spa Business
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and friends.
  1. Write a Business Plan

a. Executive Summary

Amie Pamela® Medical Spa, Inc. is a registered medical spa service that will operate in and around San Diego, California. We have been able to lease a facility that is big enough for the kind of business we intend launching and the facility is located in the heart of town.

Amie Pamela® Medical Spa, Inc. will deliver a wide range of medical spa treatments and related health and wellness services at affordable prices.

b. Products and Services
  • Providing treatments that include deeper chemical peels, injections (such as Botox), and laser treatments
  • Providing massages
  • Dermal Fillers.
  • Laser Hair Removal.
  • Body Contouring (Body Sculpting)
  • Dermabrasion Facials.
  • Providing skincare treatments
  • Retailing skincare and cosmetic merchandise.
c. Mission Statement

Our mission is to ensure that we build a successful medical spa company that will operate not just in San Diego, California but in the whole of the United States of America.

Vision Statement

Our Vision is to become one of the preferred choices of individuals and organizations when it comes to medical spa treatment and services in the United States of America.

d. Goals and Objectives

The goals and objectives of a medical spa business are to provide medical spa treatments. These treatments include deeper chemical peels, injections (such as Botox), and laser treatments.

e. Organizational Structure
  • Chief Operating Officer (Owner)
  • Manager
  • Licensed Aesthetician
  • Experienced Esthetician (Laser Technician Med Spa)
  • Nurse Practitioner “Experienced Cosmetic Injector”
  • Medical Spa Sales/Patient Care Coordinator
  • Customer Service Officer (Receptionist)

Marketing Plan

a. SWOT Analysis
Strength:
  • Excellent operational history
  • Attention to detail.
  • Accurate estimates with no hidden costs.
  • Experience and trained professionals.
  • Excellent customer testimonials.
  • Reliable and efficient delivery of medical spa treatments and services.
Weakness:
  • Not enough existing clientele to run at full capacity immediately
  • The owner is new to large scale marketing
  • Will need a loan to purchase brand new medical spa equipment
  • Lack of economies of scale.
Opportunities:
  • Growing acceptance of medical spa treatment and services
  • Build upon existing clientele
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • The first year will be financially tight while we gain customers and pay off loans
  • Competition in the area could increase
  • Management of employees requires time, money, and efforts
  • The medical and health department could change their regulatory status and decide to enforce strict regulations that can strangulate our business.
b. How Do Medical Spa Companies Make Money?
  • Providing treatments that include deeper chemical peels, injections (such as Botox), and laser treatments
  • Providing massages
  • Dermal Fillers.
  • Laser Hair Removal.
  • Body Contouring (Body Sculpting)
  • Dermabrasion Facials.
  • Providing skincare treatments
  • Retailing skincare and cosmetic merchandise
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your business by sending introductory letters alongside your brochure to all the businesses involved in healthcare fields, such as hospitals, physicians, pharmaceutical companies, healthcare-related organizations, health management organizations, and healthcare insurance providers, households, offices, and schools within and outside the city you have your medical spa.
  • Advertise your business in relevant healthcare and wellness magazines, radio, and TV stations (make yourself available for spa services related talk shows and interactive sessions on TV and Radio)
  • List your business on local directories/yellow pages
  • Attend international health and wellness spa expos, seminars, and business fairs et al
  • Create different packages for different categories of clients to coach or consult for them
  • Leverage on the internet to promote your business
  • Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
  • Engage the services of marketing executives and business developers to carry out direct marketing

Financial Projection

a. How Much Should You Charge for your Service?

For Medical Spas and aesthetic practices in high competition areas, the typical range is $6000 to $16000 per month, with an average budget of $9790 per practice in the USA.

b. How Much Profit Do Medical Spa Business Owners Make a Year?

It depends, but available reports show that on average, the day spa owner salary is $80,000 per year or more, with many owners earning more than $100,000 annually.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the medical spa company
  • The location the medical spa company is covering
  • The management style of the medical spa company
  • The business approach of the medical spa company
  • The advertising and marketing strategies adopted by the medical spa company.
  • The number of years the medical spa company is in business
d. What is the Profit Margin of a Medical Spa Company?

The profit margin of a medical spa business is not fixed. It can range from 20 to 25 percent. That means the average med spa owner profits from $300 to $375k per year. 80% of owners have a single location.

e. What is the Sales Forecast?

First Fiscal Year (FY1): $350,000

Second Fiscal Year (FY2): $500,000

Third Fiscal Year (FY3): $750,000

  1. Set Up your Office

a. How Do You Choose a Perfect Location for your Medical Spa business?
  • The demography of the location.
  • The demand for the products and services offered by medical spa companies in the location
  • The purchasing power of residents of the location
  • Accessibility of the location
  • The number of medical spa companies in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Medical Spa Business?
  • Los Angeles, California
  • Las Vegas, Nevada
  • Cambridge, Massachusetts
  • Lewiston, Maine
  • Grand Rapids, Michigan
  • Badger, Alaska
  • Chandler, Arizona
  • Seatle, Washington
  • Colorado Springs, Colorado
  • Gresham, Oregon
c. What Equipment is Needed to Operate a Medical Spa Business?

The equipment typically needed for a day spa includes massage tables, manicure and pedicure stations, and reclining facial chairs. Hydrotherapy equipment may include a Scotch hose, a hydrotherapy tub, a sauna, a Swiss shower, a Vichy shower, a Jacuzzi/whirlpool tub, and a steam cabinet.

  1. Hire Employees

When it comes to hiring employees for a standard medical spa business, you should make plans to hire a competent chief executive officer (you can occupy this position), admin manager, licensed aesthetician, experienced esthetician (laser technician med spa), nurse practitioner experienced cosmetic injector, medical spa sales/patient care coordinator and customer service officer (receptionist).

  1. Launch the Business Proper

In recent times, no medical spa company opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the medical spa business, you will officially inform people in your city that your medical spa company is open for business.

a. What Makes a Medical Spa Company Successful?
  • Choose a good location and reliable medical spa equipment
  • Partner with related stakeholders
  • Hire only competent, hardworking, and trustworthy staff
  • Throw a party to officially open the medical spa business
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your medical spa business
  • Leverage all available online and offline platforms to promote your medical spa business.
b. What Happens During a Typical Day at a Medical Spa Business?
  • The business is open for the day’s work
  • The spa beds and equipment are cleaned, adjusted, and set for the day’s job
  • Customers are attended to
  • Marketing/website upkeep
  • Administrative duties
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Medical Spa Business?
  • Good massaging and related spa skills
  • Good marketing and sales skills
  • Customer services skills
  • Interpersonal skill
  • Business management skills
  • Bargaining skill
  • Work experience in the medical spa industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling related software.